We aim to blend the robustness of traditional financial institutions with the data-driven approach of modern fintech companies to provide unique funding solutions for healthcare SMEs like diagnostic chains, pharmacy chains, hospitals, nursing homes, etc., informs Shachindra Nath, MD and CEO, Ugro Capital to Viveka Roychowdhury
After you took over Chokhani Securities in July 2018 for Rs 40 core, you rebranded it to UGRO Capital. As a founding team member and former CEO of Religare Enterprises, why did you decide to now focus on SME financing? What will be the funding/lending strategy in terms of re-payment timeline, terms etc?
Well, during my stint at Religare as group CEO, I gained quite in-depth exposure and understanding on SME lending. The SME credit opportunity is large and very underpenetrated, as traditional banks don’t prefer to lend to the segment. That’s precisely the reason why the SME sector’s contribution to the country’s GDP still stands at 30 per cent, whereas, in more developed economies, the share typically hovers around 45 per cent. The sector is still untapped and underpenetrated from the lending point of view because of its diversified nature. For instance, the business cycle and the cash flow cycle differ from automobile component manufacturers to hospitals to educational institutions. The one-size-fits-all approach doesn’t work here. Because of the ballooning credit gap, 70 per cent of the capital requirement in the SME sector is fulfilled through informal channels. As SMEs are regarded as the key growth driver of the Indian growth story, we firmly believe that the scenario has to change. And the key to cater to the sector effectively is to develop an in-depth understanding of various business models. Hence, we have adopted a sectorfocussed lending strategy for the SMEs.
We also offer customised loan products. The loan tenure could be anywhere between three months (in case of supply chain finance) to 8-10 years (for instance, secured business loans with property as a collateral).
What is the total quantum of funds available for lending? Who are the major PE and other partners?
This story is from the May 2019 edition of Express Healthcare.
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This story is from the May 2019 edition of Express Healthcare.
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